CAYUSE PRAIRIE PUBLIC SCHOOL
FLATHEAD COUNTY, MONTANA
Fiscal Year Ended June 30, 2014
AUDIT REPORT
Denning, Downey & Associates, P.C. CERTIFIED PUBLIC ACCOUNTANTS
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CAYUSE PRAIRIE PUBLIC SCHOOL
FLATHEAD COUNTY, MONTANA
Fiscal Year Ended June 30, 2014
TABLE OF CONTENTS Organization 1
Management Discussion and Analysis 2-6
Independent Auditor’s Report 7-9
Financial Statements
Government-wide Financial Statements
Statement of Net Position 10
Statement of Activities 11
Fund Financial Statements
Balance Sheet – Governmental Funds 12
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 13
Statement of Revenues, Expenditures and Changes in Fund Balance – Governmental Funds 14
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances
of Governmental Funds to the Statement of Activities
15
Statement of Net Position - Fiduciary Fund Types 16
Statement of Changes in Net Position - Fiduciary Fund Types 17
Notes to Financial Statements 18-33
Required Supplemental Information
Budgetary Comparison Schedule 34-36
Schedule of Funding Progress – Other Post Employment Benefits Other Than Pensions 37
Supplemental Information
Schedule of Enrollment 38-40
Schedule of Revenues and Expenditures – Extracurricular Fund – All Fund Accounts 41
Independent Auditor’s Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards
42-44
Report on Prior Audit Recommendations 45
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CAYUSE PRAIRIE PUBLIC SCHOOL
FLATHEAD COUNTY, MONTANA
ORGANIZATION
Fiscal Year Ended June 30, 2014
BOARD OF TRUSTEES
Kevin Fox Chairperson
Jason Rausch Vice Chairperson
Pam Skonord Trustee
Doug Tu Trustee
Jack Thatcher Trustee
DISTRICT OFFICIALS
Amy Piazzola District Superintendent
Heather Mumby Business Manager
Marcia Sheffels County Superintendent
Ed Corrigan County Attorney
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Cayuse Prairie School, District #10
Management Discussion and Analysis (MD&A)
For the Year Ended June 30, 2014
The Superintendent and the Clerk of Cayuse Prairie School District #10 have provided this
MD&A to give the reader of these statements an overview of the financial position and activities
of the school district for fiscal year ended June 30, 2014.
Financial Highlights
The net position for the school district saw a slight decrease from FY13 to FY14. This is largely
due to a decrease in capital assets and an increase in long-term liabilities. The overall decrease
from FY13 to FY14 was $973. Program expenses increase significantly due to an increase in
staff. Whereas administrative costs went down due to the hiring of a new administrator.
Using This Financial Report
The general format of this report is required by Statement No. 34 of the Governmental
Accounting Standards Board (GASB 34). Components and purposes of the report are explained
below.
Reporting the School District as a Whole
The report includes two district-wide statements that focus on operations of the district as a
whole. These statements measure inputs and outflows using an economic resources
measurement focus, and use the accrual basis of accounting. Activities that are fiduciary in
nature are not included in these statements.
A. The statement of net position shows the “assets” (what is owned), “liabilities” (what
is owed) and the “net position” (the resources that would remain if all obligations
were settled) of the school district. The statement categorizes assets to show that
some assets are very liquid, such as cash and cash equivalents. Some assets are
restricted for certain purposes or reserved for emergencies and cash flow purposes.
Some assets are invested in “fixed” or “capital” assets, such as buildings, equipment
and other long-lived property; and some assets are available to fund budgets of the
following year. For Cayuse Prairie School, the General Fund is by far the most
significant fund.
B. The Statement of Activities identifies the amounts of program-specific and general
school district revenues used to support the school district’s various functions. State
law generally requires school districts to segregate money generated for certain
specific purposes, like transportation and debt service, in separate fund accounts.
The Statement of Net Position and Statement of Activities divide the activities of the
school district into three categories:
1. Governmental activities – The school functions, including instruction, student
services, administration, etc. Property taxes, state and federal revenues usually
support most of these functions of the district.
2. Proprietary (business-type) Activities: The district does not have any
proprietary funds at this time.
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3. Trust & Fiduciary Responsibilities: The district is the trustee for the student
extra-curricular fund. This report includes the activities in a separate Statement of
Fiduciary Net Assets and Changes in Fiduciary Net Assets because the district
cannot use these assets to fund its operations. The district is responsible for
ensuring these assets are used to their intended purposes. The district also uses an
internal payroll and claims clearing fund.
4. Component Units: The district does not presently act as a fiscal host for any
cooperative.
Reporting the District’s Most Significant Funds The fund statements provide detailed information about the funds used by the school district.
State law and Generally Accepted Accounting Principles (GAAP) establish the fund structure of
school districts. State law generally requires school districts to segregate money generated for
certain specific purposes, like transportation and debt service, in separate fund accounts.
The fund statements report balances and activities of the most significant, or “major” funds
separately and combines the activities of less significant funds under a single category.
Significance of funds is determined based on the proportional size of the funds, the relative
importance of the activities of the funds to the school district’s operations, and the existence of
legal budget requirements. Internal Service funds are never reported as major funds, but are
combined and presented in a separate set of financial statements.
The Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balance are
shown for governmental funds (which reflect most of the district’s financial activity) such as the
general funds, special revenue funds for transportation and school food service, and debt service
or capital outlay funds.
These funds use the modified accrual basis of accounting that measures cash and all other
financial assets that can be readily converted to cash. The governmental fund statements provide
a detailed short term view of the school district’s general governmental operations and the basic
services it provides.
Fund statements include a reconciliation of the governmental fund statements to the district-wide
statements. Most significant differences result from the use of different presentation bases. The
district-wide statements are presented using the accrual basis of accounting and the fund
statements for governmental funds use the modified accrual basis. In addition, general capital
assets and general long-term debt are reported in the district-wide statements but not in the fund
statements.
Budget-to-Actual Comparisons The budgetary comparison schedules show how actual expenditures compared to the original and
final budgeted expenditures for the general fund during the school year ended June 30, 2014.
The following significant variances between the final expenditure budget and the actual
expenditures exist:
a. General Regular Instruction had an increase of $8,168. This was largely due to the
increase in salaries and instructional supplies from FY13 to FY14.
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b. Special Education Instruction has a decrease of $860.
c. General Supporting Services increased $101. This was largely due to salaries and
independent contracting services.
d. General Operation and Maintenance remained steady with very little variance.
e. Transportation fund remained steady with very little variance.
f. School Food or the Milk Program remained steady with very little variance.
g. Debt Service Principal and Interest remained steady with no variance.
The District as a Whole
Net position may serve over time as a useful indicator of a government’s financial position.
Cayuse Prairie School District, assets exceeded liabilities by $1,801,207 as of June 30, 2014.
Most of the district’s net position reflects its investment in capital assets (e.g. land, land
improvements, buildings and improvements, machinery and equipment.) Most of the district’s
budget power needs to be utilized for current salaries and maintenance costs as well as budgeting
for payouts of unused vacation and sick leave.
Cayuse Prairie School, Flathead County, Montana
Statement of Net Position Table 1
June 30, 2014
Change
FY14 FY13 Inc (Dec)
Current and other assets $ 827,592 $ 752,768 $ 74,824
Capital assets 3,103,975 3,137,428 (33,453)
Total assets $ 3,931,567 $ 3,890,196 $ 41,371
Long-term debt outstanding $ 2,130,115 $ 2,087,722 $ 42,393
Other liabilities 245 294 (49)
Total liabilities $ 2,130,360 $ 2,088,016 $ 42,344
Net position:
Net investment in capital assets $ 1,153,975 $ 1,187,428 $ (33,453)
Restricted 713,540 636,408 77,132
Unrestricted (deficit) (66,308) (21,656) (43,312)
Total net position $ 1,801,207 $ 1,802,180 $ (973)
The district’s total net position for the fiscal year ended June 30, 2014 were $1,801,207. This is a
slight increase from the previous year.
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Statement of Changes in Net Position Table 2
June 30, 2014
Change
FY14 FY13 Inc (Dec)
Revenues
Program revenues (by major source):
Charges for services 27,473 3,635 23,838
Operating grants and contributions 236,626 254,161 (17,535)
General revenues (by major source):
Property taxes for general purposes 609,765 625,418
(15,653)
Grants & entitlements not restricted 877,649 820,188 57,461
Investment earnings 4018 3,626 392
Miscellaneous (other revenue)
48,149 5,791
42,358
State entitlement (block grants) 34,711 34,842 (131)
State technology 4,974 1,352 3,622
County retirement 177,221 175,956 1,265
Total revenues $ 2,020,586 $ 1,924,969 $ 95,617
Change
FY14 FY13 Inc (Dec)
Program Expenses
Instructional – regular 1,113,939 1,009,078 104,861
Instructional – special education 189,803 169,883 19,920
Supporting services – operations & maintenance 161,487 165,015 (3,528)
Supporting services – general 46,089 34,109 11,980
Supporting services – educational media services 77,451 71,159 6,292
Administration – general 164,530 167,357 (2,827)
Administration – school --- 5,444 (5,444)
Administration - business 59,558 51,875 7,683
Student transportation 102,177 99,702 2,475
Extracurricular 30,894 21,573 9,321
School food 6,241 5,854 387
Debt service expense - interest 25,850 25,850 ---
Total expenses $ 1,978,019 $ 1,826,899 $ 151,120
Increase (decrease) in net position $ 42,567 $ 98,070 $ (55,503)
Capital Assets and Long-Term Debt
Capital Assets decreased slightly by $33,453. The decrease was due to additions, retirements and
depreciation. The District currently has $3,103,975 in total capital assets.
Long-term debt includes a Quality Schools Construction Bond which the District received in
2010 for $1,950,000. Long-term debt increased by $42,393 due to Compensated Absences and
Other Post Employment Benefits. Total debt for the District is $2,130,115.
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Analysis of Financial Information
The decrease in net position from FY13 to FY14 was predominately due to a decrease in
revenues from grants and property taxes.
The District’s Future
The district continues to see an increase in enrollment which has led to an increase in staff and
the school has implemented a hot lunch program which will affect the net position for FY15.
Contact for additional Information
If you have questions about this report or need additional information, contact the District Clerk
at the Cayuse Prairie School office, 897 Lake Blaine Road, Kalispell, MT 59901. (406-756-
4560).
Denning, Downey & Associates, P.C. CERTIFIED PUBLIC ACCOUNTANTS
1740 U.S. Hwy 93 South, P.O. Box 1957, Kalispell, MT 59903-1957
-7- Robert K. Denning, CPA ∙ Kim M. Downey, CPA
INDEPENDENT AUDITOR’S REPORT
Board of Trustees
Cayuse Prairie Public School
Flathead County
Kalispell, Montana
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, each
major fund, and the aggregate remaining fund information of Cayuse Prairie Public School,
Flathead County, Montana, as of and for the year ended June 30, 2014, and the related notes to
the financial statements which collectively comprise the District’s basic financial statements as
listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements
in accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the entity’s preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of significant accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinions.
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Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, each major fund, and the
aggregate remaining fund information of Cayuse Prairie Public School, Flathead County,
Montana, as of and for the year ended June 30, 2014, and the respective changes in financial
position for the year then ended in accordance with accounting principles generally accepted in
the United States of America.
Change in Accounting Principle
As described in Note 1 to the financial statements, in 2014, the Cayuse Prairie School, Flathead
County, Montana adopted new accounting guidance, GASB Statement No. 65, Items Previously
Reported as Assets and Liabilities. Our opinion is not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management’s discussion and analysis, budgetary comparison information, and schedule of
funding for other post employment benefits other than pensions on pages 2 through 6, 34 through
36, and 37 be presented to supplement the basic financial statements. Such information,
although not a part of the basic financial statements, is required by the Governmental Accounting
Standards Board, who considers it to be an essential part of financial reporting for placing the
basic financial statements in an appropriate operational, economic, or historical context. We
have applied certain limited procedures to the required supplementary information in accordance
with auditing standards generally accepted in the United States of America, which consisted of
inquiries of management about the methods of preparing the information and comparing the
information for consistency with management’s responses to our inquiries, the basic financial
statements, and other knowledge we obtained during our audit of the basic financial statements.
We do not express an opinion or provide any assurance on the information because the limited
procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the District’s basic financial statements. The schedule of revenues and
expenditures for the extracurricular fund and the schedule of enrollment are presented for
purposes of additional analysis and are not a required part of the financial statements.
The accompanying schedule of revenues and expenditures for the extracurricular fund and the
schedule of enrollment are the responsibility of management and were derived from and relate
directly to the underlying accounting and other records used to prepare the financial statements.
Such information has been subjected to the auditing procedures applied in the audit of the basic
financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the financial
statements or to the financial statements themselves, and other additional procedures in
accordance with auditing standards generally accepted in the United States of America. In our
opinion, the schedule of revenues and expenditures for the extracurricular fund and the schedule
of enrollment are fairly stated in all material respects in relation to the financial statements as a
whole.
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Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated June
22, 2015, on our consideration of the Cayuse Prairie Public School, Flathead County, Montana’s
internal control over financial reporting and on our tests of its compliance with certain provisions
of laws, regulations, contracts, and grant agreements and other matters. The purpose of that
report is to describe the scope of our testing of internal control over financial reporting and
compliance and the results of that testing, and not to provide an opinion on internal control over
financial reporting or on compliance. That report is an integral part of an audit preformed in
accordance with Government Auditing Standards in considering Cayuse Prairie Public School,
Flathead County, Montana’s internal control over financial reporting and compliance.
June 22, 2015
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Governmental
Activities
ASSETS
Current assets:
Cash and investments $ 301,892
Taxes and assessments receivable, net 16,799
Due from other governments 338
Total current assets $ 319,029
Noncurrent assets
Restricted cash and investments $ 508,563
Capital assets - land $ 57,250
Capital assets - construction in progress 51,257
Capital assets - depreciable, net 2,995,468
Total noncurrent assets $ 3,612,538
Total assets $ 3,931,567
LIABILITIES
Current liabilities
Accounts payable $ 245
Current portion of compensated absences payable 23,802
Total current liabilities $ 24,047
Noncurrent liabilities
Noncurrent portion of long-term liabilities $ 125,325
Noncurrent portion of long-term capital liabilities 1,950,000
Noncurrent portion of compensated absences 30,988
Total noncurrent liabilities $ 2,106,313
Total liabilities $ 2,130,360
NET POSITION
Net investment in capital assets $ 1,153,975
Restricted for debt service 514,072
Restricted for special projects 199,468
Unrestricted (66,308)
Total net position $ 1,801,207
See accompanying Notes to the Financial Statements
Cayuse Prairie Public School, Flathead County, Montana
Statement of Net Position
June 30, 2014
Net (Expenses) Revenues and
Changes in Net Position
Operating
Charges for Grants and Governmental
Functions/Programs Expenses Services Contributions Activities
Primary government:
Governmental activities:
Instructional - regular $ 1,113,939 $ - $ 160,763 $ (953,176)
Instructional - special education 189,803 24,146 52,132 (113,525)
Supporting services - operations & maintenance 161,487 - - (161,487)
Supporting services - general 46,089 - - (46,089)
Supporting services - educational media services 77,451 - - (77,451)
Administration - general 164,530 - - (164,530)
Administration - business 59,558 - - (59,558)
Student transportation 102,177 - 18,856 (83,321)
Extracurricular 30,894 - - (30,894)
School food 6,241 3,327 4,875 1,961
Debt service expense - interest 25,850 - - (25,850)
Total governmental activities $ 1,978,019 $ 27,473 $ 236,626 $ (1,713,920)
Total primary government $ 1,978,019 $ 27,473 $ 236,626 $ (1,713,920)
General Revenues:
Property taxes for general purposes $ 609,765
Grants and entitlements not restricted to specific programs 877,649
Investment earnings 4,018
Miscellaneous (other revenue) 48,149
State entitlement (block grants) 34,711
State technology 4,974
County retirement 177,221
Total general revenues, special items and transfers $ 1,756,487
Change in net position $ 42,567
Net position - beginning $ 1,802,180
Restatements (43,540)
Net position - beginning - restated $ 1,758,640
Net position - end $ 1,801,207
* This amount excludes the depreciation that is included in the direct expenses of the various programs
See accompanying Notes to the Financial Statements
Cayuse Prairie Public School, Flathead County, Montana
Statement of Activities
For the Fiscal Year Ended June 30, 2014
Program Revenues Primary Government
General Transportation Retirement
Miscellaneous
Programs
Debt
Service
Other
Governmental
Funds
Total
Governmental
Funds
ASSETS
Current assets:
Cash and investments $ 110,040 $ 39,345 $ 46,627 $ 98,927 $ - $ 6,953 $ 301,892
Taxes and assessments receivable, net 10,880 2,756 - - 2,959 204 16,799
Due from other governments - - - 338 - - 338
Total current assets $ 120,920 $ 42,101 $ 46,627 $ 99,265 $ 2,959 $ 7,157 $ 319,029
Noncurrent assets:
Restricted cash and investments $ - $ - $ - $ - $ 508,563 $ - $ 508,563
Total noncurrent assets $ - $ - $ - $ - $ 508,563 $ - $ 508,563
Total assets $ 120,920 $ 42,101 $ 46,627 $ 99,265 $ 511,522 $ 7,157 $ 827,592
Current liabilities:
Accounts payable $ - $ - $ - $ 245 $ - $ - $ 245
Total liabilities $ - $ - $ - $ 245 $ - $ - $ 245
DEFERRED INFLOWS OF RESOURCES
Deferred inflows of resources $ 10,880 $ 2,756 $ - $ - $ 2,959 $ 204 $ 16,799
Total deferred inflows of resources $ 10,880 $ 2,756 $ - $ - $ 2,959 $ 204 $ 16,799
FUND BALANCES
Restricted $ - $ 39,345 $ 46,627 $ 99,020 $ 508,563 $ 14,066 $ 707,621
Unassigned fund balance 110,040 - - - - (7,113) 102,927
Total fund balance $ 110,040 $ 39,345 $ 46,627 $ 99,020 $ 508,563 $ 6,953 $ 810,548
See accompanying Notes to the Financial Statements
Cayuse Prairie Public School, Flathead County, Montana
Balance Sheet
Governmental Funds
June 30, 2014
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Total fund balances - governmental funds $ 810,548
Capital assets used in governmental activities are not financial resources and, therefore, are
not reported in the funds. 3,103,975
Property taxes receivable will be collected this year, but are not available soon enough to pay
for the current period's expenditures, and therefore are deferred in the funds. 16,799
Long-term liabilities are not due and payable in the current period and therefore are not
reported as liabilities in the funds. (2,130,115)
Total net position - governmental activities $ 1,801,207
See accompanying Notes to the Financial Statements
Cayuse Prairie Public School, Flathead County, Montana
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Position
June 30, 2014
General Transportation Retirement
Miscellaneous
Programs Debt Service
Other
Governmental
Funds
Total
Governmental
Funds
REVENUES
Local revenue $ 395,584 $ 103,081 $ 256 $ 72,537 $ 111,890 $ 12,505 $ 695,853
County revenue - 9,428 177,221 - - - 186,649
State revenue 947,135 13,985 - 1,923 16,761 2,814 982,618
Federal revenue - - - 158,007 - 4,875 162,882
Total revenues $ 1,342,719 $ 126,494 $ 177,477 $ 232,467 $ 128,651 $ 20,194 $ 2,028,002
EXPENDITURES
Instructional - regular $ 670,983 $ - $ 144,427 $ 168,790 $ - $ 9,571 $ 993,771
Instructional - special education 155,921 - 23,313 3,573 - 6,996 189,803
Supporting services - operations & maintenance 137,303 - 10,623 12,157 - 1,404 161,487
Supporting services - general 39,832 - 6,257 - - - 46,089
Supporting services - educational media services 67,133 - 10,073 245 - - 77,451
Administration - general 133,798 14,440 15,517 775 - - 164,530
Administration - business 44,397 8,994 6,167 - - - 59,558
Student transportation - 102,177 - - - - 102,177
Extracurricular 28,318 - 2,536 40 - - 30,894
School food - - - - - 6,241 6,241
Debt service expense - interest - - - - 25,850 - 25,850
Capital outlay 57,006 - - 30,856 - - 87,862
Total expenditures $ 1,334,691 $ 125,611 $ 218,913 $ 216,436 $ 25,850 $ 24,212 $ 1,945,713
Net Change in Fund Balance $ 8,028 $ 883 $ (41,436) $ 16,031 $ 102,801 $ (4,018) $ 82,289
Fund balances - beginning $ 102,012 $ 38,462 $ 88,063 $ 82,989 $ 405,762 $ 10,971 $ 728,259
Fund balance - ending $ 110,040 $ 39,345 $ 46,627 $ 99,020 $ 508,563 $ 6,953 $ 810,548
See accompanying Notes to the Financial Statements
Cayuse Prairie Public School, Flathead County, Montana
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
For the Fiscal Year Ended June 30, 2014
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Amounts reported for governmental activities in the statement of
activities are different because:
Net change in fund balances - total governmental funds $ 82,289
Governmental funds report capital outlays as expenditures while governmental activities
report depreciation expense to allocate those expenditures over the life of the assets:
- Capital assets purchased 87,862
- Depreciation expense (77,775)
Revenues in the Statement of Activities that do not provide current financial resources are
not reported as revenues in the funds:
- Long-term receivables (deferred revenue) (7,416)
The change in compensated absences is shown as an expense in the
Statement of Activities (17,874)
Termination benefits are shown as an expense in the Statement of Activities and not reported
on the Statement of Revenues, Expenditures and Changes in Fund Balance:
- Post-employment benefits other than retirement liability (24,519)
Change in net position - Statement of Activities $ 42,567
See accompanying Notes to the Financial Statements
Cayuse Prairie Public School, Flathead County, Montana
Reconciliation of the Statement of Revenues, Expenditures.
to the Statement of Activities
For the Fiscal Year Ended June 30, 2014
and Changes in Fund Balances of Governmental Funds
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Private Purpose Agency
Trust Funds Funds
ASSETS
Cash and short-term investments $ 31,046 $ 107,904
Total assets $ 31,046 $ 107,904
LIABILITIES
Warrants payable $ - $ 107,904
Total liabilities $ - $ 107,904
NET POSITION
Assets held in trust $ 31,046
See accompanying Notes to the Financial Statements
Cayuse Prairie Public School, Flathead County, Montana
Statement of Net Position
Fiduciary Funds
June 30, 2014
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Private Purpose
Trust Funds
ADDITIONS
Contributions:
Student activities $ 22,028
Total contributions 22,028
Total additions $ 22,028
DEDUCTIONS
Student activities $ 15,326
Total deductions $ 15,326
Change in net position $ 6,702
Net Position - Beginning of the year $ 24,344
Net Position - End of the year $ 31,046
See accompanying Notes to the Financial Statements
Cayuse Prairie Public School, Flathead County, Montana
Statement of Changes in Net Position
Fiduciary Funds
For the Fiscal Year Ended June 30, 2014
CAYUSE PRAIRIE PUBLIC SCHOOL
FLATHEAD COUNTY, MONTANA
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2014
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NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The School District complies with generally accepted accounting principles (GAAP).
GAAP includes all relevant Governmental Accounting Standards Board (GASB)
pronouncements.
GASBS No. 65, Items Previously Reported as Assets and Liabilities, establishes
accounting and financial reporting standards that reclassify, as deferred outflows of
resources or deferred inflows of resources, certain items that were previously reported as
assets and liabilities and recognizes, as outflows of resources or inflows of resources,
certain items that were previously reported as assets and liabilities. This standard is
effective for fiscal year ending June 30, 2014.
Financial Reporting Entity
In determining the financial reporting entity, the District complies with the provisions of
GASB statement No. 14, The Financial Reporting Entity, as amended by GASB
statement No. 61, The Financial Reporting Entity: Omnibus, and includes all component
units of which the District appointed a voting majority of the component units’ board; the
District is either able to impose its’ will on the unit or a financial benefit or burden
relationship exists. In addition, the Entity complies with GASB statement No. 39
Determining Whether Certain Organizations Are Component Units which relates to
organizations that raise and hold economic resources for the direct benefit of the Entity.
Primary Government
The District was established under Montana law to provide elementary services to
residents of the District. The District provides education from kindergarten through the
eighth grade.
The District is managed by a Board of Trustees, elected in district-wide elections, and by
an administration appointed by and responsible to the Board. The financial statements
include all of the operations of the District controlled by the Board of Trustees. Based on
the criteria for determining the reporting entity (separate legal entity and financial or
fiscal dependency on other governments) the District is a primary government as defined
by GASB Cod. Sec. 2100 and has no component units.
Basis of Presentation, Measurement Focus and Basis of Accounting.
Government-wide Financial Statements:
Basis of Presentation
The Government-wide Financial Statements (the Statement of Net Position and the
Statement of Activities) display information about the reporting government as a whole
and its component units. They include all funds of the reporting entity except fiduciary
funds. The statements distinguish between governmental and business-type activities.
CAYUSE PRAIRIE PUBLIC SCHOOL
FLATHEAD COUNTY, MONTANA
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2014
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Governmental activities generally are financed through taxes, intergovernmental
revenues, and other non-exchange revenues. Business-type activities are financed in
whole or in part by fees charged to external parties for goods or services.
The Statement of Activities presents a comparison between direct expenses and program
revenues for each function of the District’s governmental activities. Direct expenses are
those that are specifically associated with a program or function. The District does not
charge indirect expenses to programs or functions. The types of transactions reported as
program revenues include 1) charges to customers or applicants who purchase, use, or
directly benefit from goods, services, or privileges provided by a given function or
activity and 2) operating grants and contributions, and 3) capital grants and contributions.
Revenues that are not classified as program revenues, including all property taxes, are
presented as general revenues.
Certain eliminations have been made as prescribed by GASB 34 in regards to inter-fund
activities, payables and receivables. All internal balances in the Statement of Net
Position have been eliminated except those representing balances between the
governmental activities and the business-type activities, which are presented as internal
balances and eliminated in the total primary government column. In the Statement of
Activities, internal service fund transactions have been eliminated; however, those
transactions between governmental and business-type activities have not been eliminated.
Measurement Focus and Basis of Accounting
Government-Wide Financial Statements
On the government-wide Statement of Net Position and the Statement of Activities, both
governmental and business-type activities are presented using the economic resources
measurement focus and the accrual basis of accounting. Under the accrual basis of
accounting, revenues are recognized when earned and expenses are recorded when the
liability is incurred regardless of the timing of the cash flows. Property taxes are
recognized as revenues in the year for which they are levied. Grants and similar items
are recognized as revenue as soon as all eligibility requirements imposed by the provider
have been met. The District generally applies restricted resources to expenses incurred
before using unrestricted resources when both restricted and unrestricted net assets are
available.
CAYUSE PRAIRIE PUBLIC SCHOOL
FLATHEAD COUNTY, MONTANA
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2014
-20-
Fund Financial Statements:
Basis of Presentation
Fund financial statements of the reporting entity are organized into funds, each of which
is considered to be separate accounting entities. Each fund is accounted for by providing
a separate set of self-balancing accounts. Fund accounting segregates funds according to
their intended purpose and is used to aid management in demonstrating compliance with
finance-related legal and contractual provisions. The minimum number of funds is
maintained consistent with legal and managerial requirements. Funds are organized into
three categories: governmental, proprietary, and fiduciary. An emphasis is placed on
major funds within the governmental and proprietary categories. Each major fund is
displayed in a separate column in the governmental funds statements. All of the
remaining funds are aggregated and reported in a single column as non-major funds. A
fund is considered major if it is the primary operating fund of the District or meets the
following criteria:
a. Total assets combined with deferred outflows of resources, liabilities
combined with deferred inflows of resources, revenues, or
expenditures/expenses of that individual governmental or enterprise fund are
at least 10 percent of the corresponding total for all funds of that category or
type; and
b. Total assets combined with deferred outflows of resources, liabilities
combined with deferred inflows of resources, revenues, or
expenditures/expenses of that individual governmental or enterprise funds are
at least 5 percent of the corresponding total for all governmental and
enterprise funds combined.
Measurement Focus and Basis of Accounting
Governmental Funds
Modified Accrual All governmental funds are accounted for using the modified accrual basis of accounting.
Under the modified accrual basis of accounting, revenues are recorded when susceptible
to accrual; i.e., both measurable and available. “Measurable” means the amount of the
transaction can be determined. “Available” means collectible within the current period or
soon enough thereafter to be used to pay liabilities of the current period.
The District defined the length of time used for “available” for purposes of revenue
recognition in the governmental fund financial statements to be upon receipt.
Expenditures are recorded when the related fund liability is incurred, except for
unmatured interest on general long-term debt which is recognized when due, and certain
compensated absences and claims and judgments which are recognized when the
obligations are expected to be liquidated with expendable available financial resources.
General capital asset acquisitions are reported as expenditures in governmental funds and
proceeds of general long-term debt and acquisitions under capital leases are reported as
other financing sources.
CAYUSE PRAIRIE PUBLIC SCHOOL
FLATHEAD COUNTY, MONTANA
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2014
-21-
Property taxes, charges for current services, and interest associated with the current fiscal
period are all considered to be susceptible to accrual and so have been recognized as
revenues of the current fiscal period. Expenditure-driven grants are recognized as revenue
when the qualifying expenditures have been incurred and all other grant requirements
have been met. Entitlements and shared revenues are recorded at the time of receipt or
earlier if the susceptible to accrual criteria are met. All other revenue items are
considered to be measurable and available only when cash is received by the District.
Major Funds:
The District reports the following major governmental funds:
General - This is the District’s primary operating fund and it accounts for all financial
resources of the District except those required to be accounted for in other funds.
Transportation – Authorized by Section 20-10-143, MCA, for the purpose of financing
the maintenance and operation of district owned school buses, contracts with private
carriers for school bus service, individual transportation contracts, and any amount
necessary for the purchase, rental, or insurance of yellow school buses or operation of the
transportation program. The fund may be used only to support costs of home-to-school
transportation.
Retirement – Authorized by Section 20-9-501, MCA for the purpose of financing the
employer’s contribution to the Teacher’s Retirement System (TRS), the Public
Employees’ Retirement System (PERS), Unemployment Compensation and Social
Security. Funded by a county-wide levy for retirement.
Miscellaneous Programs – Authorized by Section 20-9-507, MCA, for the purpose of
accounting for local, state or federal grants and reimbursements. Donations and
expendable trusts for scholarships or other purposes that support district programs are
deposited in this fund.
Debt Service – Authorized by Section 90-3-438, MCA, for the purpose of paying interest
and principal on outstanding bonds.
Fiduciary Funds
Fiduciary funds presented using the economic resources measurement focus and the
accrual basis of accounting (except for the recognition of certain liabilities of defined
benefit pension plans and certain postemployment healthcare plans). The required
financial statements are a statement of fiduciary net position and a statement of changes
in fiduciary net assets. The fiduciary funds are:
CAYUSE PRAIRIE PUBLIC SCHOOL
FLATHEAD COUNTY, MONTANA
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2014
-22-
Agency Funds – To report resources held by the reporting government in a purely
custodial capacity (assets equal liabilities). This fund primarily consist of assets held by
the District as an agent for individuals, private organizations, other local governmental
entities and the District’s claims and payroll clearing funds.
Student Extracurricular Activities – The Student Extracurricular Activities Fund is
authorized by Section 20-9-504, MCA, to account for various student activities, such as
athletics, clubs, classes, student government organizations, student publications and other
such activities. Separate fund accounts within the Extracurricular Fund are maintained to
account for these various activities. Unlike other district funds, the money for these
activities may be maintained in bank accounts outside the control of the County
Treasurer. The fund is administered by school district administrators, faculty members,
and student organizations under the guidelines and policies established by the Board of
Trustees and in accordance with the “Student Activity Fund Accounting” guidelines.
Required guidelines are available from the Montana Association of School Business
Officials (MASBO) or from OPI.
NOTE 2. CASH, CASH EQUIVALENTS, AND INVESTMENTS
Cash Composition
The District’s cash, except for the Student Extracurricular Fund (an expendable trust) is
held by the County Treasurer and pooled with other County cash. School district cash
which is not necessary for short-term obligations, the District participates in a County-
wide investment program whereby all available cash is invested by the County Treasurer
in pooled investments. Interest earned on the pooled investments is distributed to each
contributing entity and fund on a pro rata basis. The County’s investment portfolio as of
June 30, 2014, consisted of certificates deposits, Federal Home Loan Bank investments,
U.S. Government Securities, and Federal National Mortgage Association investments.
The School District does not own specific identifiable investment securities in the pool;
therefore, is not subject to categorization. Information regarding investment risk,
collateral, security, and fair values for Flathead County deposits and investments is
available from Flathead County Treasurer’s office, 800 South Main Street, Kalispell, MT
59901. Fair value approximates carrying value for investments as of June 30, 2014.
Authorized investments allowed by Section 20-9-213, MCA, include savings or time
deposits in a state or national bank, building or loan association, or credit union insured
by the FDIC or NCUA located in the state; repurchase agreements; and the State Unified
Investment Program. Further, Section 7-6-202, MCA, authorizes investments in U.S.
government treasury bills, notes, bonds, U.S. Treasury obligations, treasury receipts,
general obligations of certain agencies of the United States, and U.S. government security
money market fund if the fund meets certain conditions.
CAYUSE PRAIRIE PUBLIC SCHOOL
FLATHEAD COUNTY, MONTANA
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2014
-23-
Deposits
The District’s deposit balance at year end was $31,046 and the bank balance was
$31,258. The District’s deposits were fully insured by FDIC at year end.
NOTE 3. RESTRICTED CASH/INVESTMENTS
The following restricted cash/investments were held by the District as of June 30, 2014.
Description Amount
Bond Requirement $508,563
NOTE 4. RECEIVABLES
An allowance for uncollectible accounts was not maintained for real and personal
property taxes receivable. The direct write-off method is used for these accounts.
Property tax levies are set in August, after the County Assessor delivers the taxable
valuation information to the County, in connection with the budget process, and are based
on taxable values listed as of January 1 for all property located in the District. Taxable
values are established by the Montana Department of Revenue, and a revaluation of all
property is required to be completed on a periodic basis. Taxable value is defined by
Montana statute as a fixed percentage of market value.
Real property taxes are generally billed in October and are payable 50% by November 30
and 50% by May 31. After these dates, taxes become delinquent and become a lien on
the property. Personal property is assessed and personal property taxes are billed
throughout the year, with a significant portion generally billed in May, June, and July.
Personal property taxes are based on levies set during the prior August. These taxes
become delinquent 30 days after billing.
Taxes that become delinquent are charged interest at the rate of 5/6 of 1% a month plus a
penalty of 2%. Real property on which taxes remain delinquent and unpaid may be sold
at tax sales. In the case of personal property, the property is to be seized and sold after
the taxes become delinquent.
NOTE 5. INVENTORIES
The costs of inventories are recorded as an expenditure when purchased.
CAYUSE PRAIRIE PUBLIC SCHOOL
FLATHEAD COUNTY, MONTANA
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2014
-24-
NOTE 6. CAPITAL ASSETS
The District’s assets are capitalized at historical cost or estimated historical cost. District
policy has set the capitalization threshold for reporting capital assets at $5,000. Gifts or
contributions of capital assets are recorded at fair market value when received. The costs
of normal maintenance and repairs are charged to operations as incurred. Improvements
are capitalized and depreciated over the remaining useful lives of the related capital
assets, as applicable. Depreciation is recorded on a straight-line basis over the useful lives
of the assets as follows:
Buildings 50 – 125 years
Improvements other than buildings 5 – 25 years
Machinery and Equipment 4 – 10 years
In June 1999, the Governmental Accounting Standards Board (GASB) issued Statement
No. 34 which requires the inclusion of infrastructure capital assets in local governments’
basic financial statements. In accordance with Statement No. 34, the District has no
infrastructure to include in the 2014 Basic Financial Statements. The government has
elected not to retroactively report general infrastructure assets.
A summary of changes in governmental capital assets was as follows: Balance Transfers / Balance
July 1, 2013 Additions Deletions Adjustments June 30, 2014
Capital assets not being depreciated:
Land $ 57,250 $ - $ - $ - $ 57,250
Construction in progress 55,825 51,257 - (55,825) 51,257
Total capital assets not being depreciated $ 113,075 $ 51,257 $ - $ (55,825) $ 108,507
Other capital assets:
Buildings $ 3,289,783 $ - $ (20,246) $ - $ 3,269,537
Improvements other than buildings 236,462 36,605 (4,681) 55,825 324,211
Machinery and equipment 143,915 - (59,024) 33,222 118,113
Total other capital assets at historical cost $ 3,670,160 $ 36,605 $ (83,951) $ 89,047 $ 3,711,861
Less: accumulated depreciation $ (645,807) $ (77,775) $ 83,951 $ (76,762) $ (716,393)
Total $ 3,137,428 $ 10,087 $ - $ (43,540) $ 3,103,975
Governmental capital assets depreciation expense was charged to functions as follows:
Governmental Activities:
Instructional – regular $ 77,775
CAYUSE PRAIRIE PUBLIC SCHOOL
FLATHEAD COUNTY, MONTANA
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2014
-25-
NOTE 7. LONG TERM DEBT OBLIGATIONS
In the governmental-wide financial statements, outstanding debt is reported as liabilities.
Bond issuance costs, bond discounts or premiums are expensed at the date of sale.
The governmental fund financial statements recognize the proceeds of debt and
premiums as other financing sources of the current period. Issuance costs are reported as
expenditures.
Changes in Long-Term Debt Liabilities - During the year ended June 30, 2014, the
following changes occurred in liabilities reported in long-term debt:
Governmental Activities:
Balance Balance Due Within
July 1, 2013 Additions June 30, 2014 One Year
$ 1,950,000 $ $ 1,950,000 $ -
Compensated absences 36,916 17,874 54,790 23,802
Other post-employment 100,806 24,519 125,325 -
benfits*
Total $ 2,087,722 $ 42,393 $ 2,130,115 $ 23,802
General Obligation Bonds,
Series 2010 Qualified
School Construction Bond
*See Note 8
In prior years the general fund and the compensated absences fund was used to liquidate
compensated absences and claims and judgments.
Qualified School Construction Bonds (QSCB) – Tax Credit Bond
On December 15, 2009, the Board of Trustees of the Cayuse Prairie School District
adopted a resolution authorizing the issuance, sale and deliver of the District’s Taxable
General Obligation Bonds, Series 2010 Qualified School Construction Bonds (Tax Credit
Bonds) in the amount of $1,950,000 for the purpose of paying the costs of construction of
two new classrooms and a gym. The bonds shall mature on June 15, 2026 in the
principal amount of $1,950,000.
The QSC bonds are direct obligations and pledge the full faith and credit of the District.
The QSC bonds outstanding as of June 30, 2014 were as follows:
Purpose
Origination
Date
Interest
Rate
Term
Maturity
Date
Principal
Amount
Annual
Payment
Balance
June 30, 2014
QSC Bond Series 2010 01/28/2010 1.3% 16 yrs 6/15/2026 $1,950,000 Varies $ 1,950,000
To provide for the payment of the principal amount of the bonds at maturity, the District,
shall, on June 15 in each fiscal year, commencing on June 15, 2011 and ending on June
15, 2016, deposit the payments on the bonds with a registrar who will remit the payment
CAYUSE PRAIRIE PUBLIC SCHOOL
FLATHEAD COUNTY, MONTANA
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2014
-26-
to the depository trust company together with the investment earnings on the Debt
Service Account on hand on such date, will equal the sinking fund payment schedule for
the bonds.
Interest on the bonds at the supplemental interest rate of 1.30% is payable semiannually
on each June 15 and December 15, commencing December 15, 2010. Annually interest
payments are set forth in the following table.
Fiscal
Year Interest
Payments 2015 $ 25,350
2016 25,350
2017 25,350
2018 25,350
2019 25,350
2020 25,350
2021 25,350
2022 25,350
2023 25,350
2024 25,350
2025 25,350
2026 25,350
Total $ 304,200
Pursuant to the Sinking Fund Agreement, the Treasurer will maintain the sinking fund
payments, and investment earnings thereon, in a separate account within the Debt Service
Account to be applied to the payment of the principal of the Bonds. The annual required
payment in the sinking fund is $121,875. As of June 30, 2014, the account balance of the
sinking fund is $508,563.
Compensated Absences
Compensated absences are absences for which employees will be paid for time off earned
for time during employment, such as earned vacation and sick leave. Non-teaching
District employees earn vacation leave ranging from fifteen to twenty-four days per year
depending on the employee’s years of service. Vacation leave may be accumulated not
to exceed two times the maximum number of days earned annually. Sick leave is earned
at a rate of one day per month for non-teaching employees. Upon retirement or
termination, employees are paid for 100% of unused vacation leave and 25% of unused
sick leave. Upon termination, all payments are made at the employee’s current rate of
pay.
Teachers are awarded fifteen days annually of sick leave and unused sick leave may
accumulate to 75 days. Teachers are paid for 25% of unused sick leave only after five
years of service with the District.
CAYUSE PRAIRIE PUBLIC SCHOOL
FLATHEAD COUNTY, MONTANA
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2014
-27-
The liability associated with governmental fund-type employees is reported in the
governmental-type activities.
NOTE 8. POSTEMPLOYMENT HEALTHCARE PLAN
Plan Description. The healthcare plan provides for, and Montana State Law (2-18-704)
requires local governments to allow employees with at least 5 years of service and who
are at least age 50 along with surviving spouses and dependents to stay on the
government's health care plan as long as they pay the same premium. Since retirees are
usually older than the average age of the plan participants they receive a benefit of lower
insurance rates. This benefit is reported as the Other Post Employment Benefits (OPEB)
liability. The government has less than 100 plan members and thus qualifies to use the
"Alternative Measurement Method" for calculating the liability. The above described
OPEB plan does not provide a stand-alone financial report.
Funding Policy. The government pays OPEB liability costs on a pay-as-you-go basis.
A trust fund for future liabilities has not been established.
Funding Status and funding Progress. The funded status of the plan as of June 30,
2014, was as follows:
Actuarial Accrued Liability (AAL) $ 187,992
Actuarial value of plan assets -
Unfunded Actuarial Accrued Liability (UAAL) $ 187,992
Funded ratio (actuarial value of plan assets/AAL) 0%
Covered payroll (active plan members) $ 971,007
UAAL as a percentage of covered payroll 19%
Annual OPEB Cost and Net OPEB Obligation. The government's annual other post
employment benefit (OPEB) cost (expense) is calculated based on the annual required
contribution of the employer (ARC), an amount determined in accordance with the
parameter of GASB statement 45. The ARC represents a level of funding that, if paid
on an ongoing basis, is projected to cover normal cost each year and amortize any
unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty (30)
years. The following table shows the components of the government's annual OPEB
cost for the year, the amount actually contributed to the plan, and changes in the
government's net OPEB obligation.
Annual Required Contribution (ARC) $ 24,519
Interest on net OPEB obligation -
Adjustment to ARC -
Annual OPEB cost (expense) $ 24,519
Contributions made -
CAYUSE PRAIRIE PUBLIC SCHOOL
FLATHEAD COUNTY, MONTANA
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2014
-28-
Increase in net OPEB obligation $ 24,519
Net OPEB obligation - beginning of year 100,806
Net OPEB obligation - end of year $ 125,325
Actuarial Methods and Assumptions. The following actuarial methods and assumptions
were used:
Actuarial cost method
Unit Credit Cost
Method
Average age of retirement (based on historical
data) 62
Discount rate (average anticipated rate) 0.17%
Average salary increase (Consumer Price Index) 1.8%
Health care cost rate trend (Federal Office of the Actuary)
Year % Increase
2012 3.80%
2013 4.00%
2014 7.80%
2015 6.40%
2016 6.20%
2017 6.00%
2018 6.40%
2019 6.80%
2020 6.90%
2021 6.70%
2022 and after 6.90%
NOTE 9. STATE-WIDE RETIREMENT PLANS
The District participates in two cost-sharing, multiple-employer defined benefit pension
plans. The plans provide retirement, death, and disability benefits to plan members and
beneficiaries with amounts determined by the State. Teaching employees (including
principals and superintendents) are covered by Montana Teachers Retirement Plan
(TRS), and substantially all other District employees are covered by the Montana Public
Employees Retirement System (PERS). The plans are established by Montana law and
administered by the State of Montana. The plans are cost-sharing multiple-employer
defined benefit plans that provide retirement, disability and death benefits to plan
members and beneficiaries, with amounts determined by the State. However, PERS
members may have chosen the defined contribution retirement plan. Under this plan it
puts the employee in control of investments options and their retirement is based upon the
cash in their investment account.
CAYUSE PRAIRIE PUBLIC SCHOOL
FLATHEAD COUNTY, MONTANA
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2014
-29-
Contribution rates are required and determined by State law. The contribution rates,
expressed as a percentage of covered payroll for the fiscal year ended June 30, 2014,
were:
PERS** TRS
Employer 7.80% 8.47%
Employee 7.90%* 8.15%
State 0.37% 2.49% * For PERS members hired prior 7/1/2011 that rate is
6.90% ** For the defined contribution plan all rates are the
same except only 4.19% of the employer amount is
added to the individuals account
The State contribution qualifies as an on-behalf payment. These amounts have not been
recorded in the District’s financial statements and were considered immaterial.
Publicly available financial reports that include financial statements and required
supplementary information may be obtained for the plans by writing or calling:
1. Montana Public Employee Retirement Administration, P.O. Box 200131,
Helena, Montana 59620-0131 Phone: 1-406-444-3154.
2. Teachers’ Retirement System, P.O. Box 200319, Helena, Montana 59620-
0139 Phone: 1-406-444-3134.
The District's contributions for the years ended June 30, 2012, 2013, and 2014, as listed
below, were equal to the required contributions for each year.
PERS TRS
2012 $ 10,915 $ 73,563
2013 $ 11,542 $ 67,491
2014 $ 12,379 $ 89,079
NOTE 10. LOCAL RETIREMENT PLANS
Deferred Compensation Plan
The District offers its employees a deferred compensation plan created in accordance
with Internal Revenue Code Section 457. The plan available to all District employees,
permits them to defer a portion of their salary until future years. Participation in the plan
is optional. The deferred compensation is not available to employees until termination,
retirement, death or unforeseeable emergency.
CAYUSE PRAIRIE PUBLIC SCHOOL
FLATHEAD COUNTY, MONTANA
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2014
-30-
NOTE 11. FUND BALANCE CLASSIFICATION POLICIES AND PROCEDURES
For assigned fund balance the body or official authorized to assign amounts to a specific
purpose is the Business Manager and the policy established by the governing body
pursuant to which that authorization is given is Board Policy.
The government considers restricted amounts to have been spent first when an
expenditure is incurred for purposes for which both restricted and unrestricted fund
balance is available.
The government considers that committed amounts would be reduced first, followed by
assigned amounts, and then unassigned amounts when expenditures are incurred for
purposes for which amounts in any of those unrestricted fund balance classifications
could be used.
Restricted Fund Balance
Fund Amount Purpose of Restriction
Transportation $ 39,345 Student transportation
Retirement 46,627 Employer costs of benefits
Miscellaneous Programs 99,020 Third party grantor requirements
Debt Service 508,563 Debt service
All other aggregate:
5,088 School food
1,395 Operations and Maintenance
2,550 Debt service
5,033 Instruction - regular
$ 707,621
NOTE 12. DEFICIT FUND BALANCES/NET POSITION
Fund Name Amount Reason for Deficit How Deficit will be eliminated Tuition $ (7,113) Error in budget preparation Subsequent years tax revenues
NOTE 13. RESTATEMENTS
During the current fiscal year, the following adjustments relating to prior years’
transactions were made to net position.
Fund Amount Reason for Adjustment Government-wide $ (43,540) Capital asset adjustment
CAYUSE PRAIRIE PUBLIC SCHOOL
FLATHEAD COUNTY, MONTANA
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2014
-31-
NOTE 14. JOINT VENTURES
Joint ventures are independently constituted entities generally created by two or more
governments for a specific purpose which are subject to joint control, in which the
participating governments retain 1) an ongoing financial interest or 2) an ongoing
financial responsibility.
The District is a member of the Flathead Special Education Cooperative. The
Cooperative is comprised of 16 member districts, each of which contributes to the
operating costs of the Cooperative based on an annual fiscal budget adopted by the
Cooperative and the benefits derived from the Cooperative’s services. Every year each
member district appoints a member to the Joint Advisory Board. From this board a four
member Management Council is elected to administrate the Cooperative. The County
Superintendent of Schools is the prime fiscal agent.
The District’s contribution to the Cooperative was $3,573 for the fiscal year ended June
30, 2014. Separate financial statements are available from the Flathead Special
Education Cooperative.
The District, along with other school districts, entered into a Multi-District/Interlocal
Cooperative Agreement to create a multi-district or interlocal cooperative to allow the
participants to cooperate and jointly fund certain services, activities, and undertakings
deemed beneficial by the participating Districts. The consortium has a Steering
Committee consisting of up to 8 Superintendents or their designee.
The District is also a member of the Northwest Montana Education Cooperative. The
purpose is to maintain and employ personnel to oversee and coordinate the operation and
management of education services including joint purchases or materials and the
curriculum development process. The Cooperative is comprised of 22 member districts,
each of which contributes to the operating costs of the Cooperative based on an annual
fiscal budget adopted by the Cooperative and the benefits derived from the Cooperative’s
services. Every year, each member district appoints a member to the Joint Advisory
Board. From this board, a five member Management Council is elected to administer the
Cooperative. The County Superintendent of Schools is the prime fiscal agent. The
Districts’ contribution to the Cooperative was $6,567 for the fiscal year ended June 30,
2014. Separate financial statements are available from the Flathead County Education
Cooperative.
The District is a member of the Flathead County Program of Students with Severe
Communications Disorders. This program is a collaborative effort by the school districts
of Flathead County to meet the needs to students who have severe communication needs
with accompanying behavior and learning difficulties. The goal of the program is to
provide a positive environment to meet the unique needs of children and adolescents in
these areas. The collaborative effort allows resources to be shared reducing the fiscal
impact of these services on each district individually. The member districts provide fiscal
responsibility to the Host District which is the Flathead Special Education Cooperative in
CAYUSE PRAIRIE PUBLIC SCHOOL
FLATHEAD COUNTY, MONTANA
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2014
-32-
the form of a participation and placement fees, and special education tuition. The Special
Education Directors from the participating districts serve as the Advisory Board for the
program, and are responsible for monitoring the program’s compliance with Montana and
Federal rules and regulations including all special education law.
The District is a member of the Flathead Crossroads Interlocal Agreement which is a
collaborative effort by the school districts of Flathead County to meet the needs of
students who have sever emotional/behavioral needs. The Special Education Directors
from the participating district will serve as the Advisory Board of the Interlocal.
Evergreen School District, Flathead County, Montana is the host District. Each District
electing to participate agrees to provide fiscal responsibility to the Host District which
includes a participation fee based on ANB. Each District is charged a fee for each
student participating in the program. For the fiscal year ended June 30, 2014, the District
had two students participating.
The District is a host for the Cayuse Prairie Special Education Program for Students with
Moderate/Severe Cognitive and or/Communication Disabilities. The goal of the program
is to provide a positive environment to meet the unique needs of children and
adolescents. This interlocal agreement began in the 2013-2014 school year. It currently
has 8 member districts. The member districts provide fiscal responsibility to the host
district which includes placement fees.
NOTE 15. SERVICES PROVIDED BY OTHER GOVERNMENTS
County Provided Services
The District is provided various financial services by Flathead County. The County also
serves as cashier and treasurer for the District for tax and assessment collections and
other revenues received by the County which are subject to distribution to the various
taxing jurisdictions located in the County. The collections made by the County on behalf
of the District are accounted for in an agency fund in the District’s name and are
periodically remitted to the District by the County Treasurer. No service charges have
been recorded by the District or the County.
NOTE 16. RISK MANAGEMENT
The District faces considerable number of risks of loss, including (a) damage to and loss
of property and contents, (b) employee torts, (c) professional liability, i.e., errors and
omissions, (d) environmental damage, (e) workers' compensation, i.e., employee injuries,
and (f) medical insurance costs of employees. Settled claims resulting from these risks
have not exceeded commercial insurance coverage in any of the past three fiscal years.
Insurance Polices
Commercial policies transferring all risks of loss, except for relatively small deductible
amounts are purchased for property and content damage, employee torts, and professional
liability. Employee medical insurance is provided for by a commercial carrier. And,
CAYUSE PRAIRIE PUBLIC SCHOOL
FLATHEAD COUNTY, MONTANA
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2014
-33-
given the lack of coverage available, the District has no coverage for potential losses
from environmental damages.
Insurance Pools:
The Montana Schools Group Insurance Authority (MSGIA) was created pursuant to the
Interlocal Cooperation Act by execution of an Interlocal Agreement creating the
MSGIA. The MSGIA is responsible for paying all workers' compensation claims of the
member school districts. Each member of the MSGIA is jointly and severally liable for
the full amount of any and all known or unknown claims of each member arising during
the member's participation in the program. The MSGIA purchases workers'
compensation reinsurance to provide statutory excess limits. The MSGIA contracts with
Montana School Boards Association (MTSBA) to provide third party administrative
services to the program. The MTSBA provides general program management, claim
management, and risk management services to its program members.
The Montana School Unemployment Insurance Program (MSUIP) was created pursuant
to the Interlocal Cooperation Act by execution of an Interlocal Agreement creating the
MSUIP. The MSUIP is responsible for paying all unemployment insurance claims of the
member school districts. Each member of the MSUIP is jointly and severally liable for
the full amount of any and all known or unknown claims of each member arising during
the member's participation in the program. The MSUIP contracts with Montana School
Boards Association (MTSBA) to provide third party administrative services to the
program. The MTSBA provides general program management and technical services to
its program members.
Separate audited financial statements are available from Montana Schools Group
Insurance Authority for MSGIA and MSUIP.
-34-
ACTUAL
AMOUNTS VARIANCE
(BUDGETARY WITH FINAL
ORIGINAL FINAL BASIS) See Note A BUDGET
RESOURCES (INFLOWS):
Local revenue $ 393,258 $ 393,258 $ 395,584 $ 2,326
County revenue - - - -
State revenue 946,167 946,167 947,135 968
Amounts available for appropriation $ 1,339,425 $ 1,339,425 $ 1,342,719 $ 3,294
CHARGES TO APPROPRIATIONS (OUTFLOWS):
Instructional - regular $ 662,815 $ 662,815 $ 670,983 $ (8,168)
Instructional - special education 156,781 156,781 155,921 860
Supporting services - operations & maintenance 178,236 178,236 137,303 40,933
Supporting services - general 39,731 39,731 39,832 (101)
Supporting services - educational media services 64,774 64,774 67,133 (2,359)
Administration - general 150,444 150,444 133,798 16,646
Administration - business 44,644 44,644 44,397 247
Student transportation - - - -
Extracurricular 28,000 28,000 28,318 (318)
Capital outlay - - 57,006 (57,006)
Other current charges 14,000 14,000 - 14,000
Total charges to appropriations $ 1,339,425 $ 1,339,425 $ 1,334,691 $ 4,734
Net change in fund balance $ 8,028
Fund balance - beginning of the year $ 102,012
Fund balance - end of the year $ 110,040
Cayuse Prairie Public School, Flathead County, Montana
Budgetary Comparison Schedule
For the Fiscal Year Ended June 30, 2014
BUDGETED AMOUNTS
General
-35-
ACTUAL
AMOUNTS VARIANCE
(BUDGETARY WITH FINAL
ORIGINAL FINAL BASIS) See Note A BUDGET
RESOURCES (INFLOWS):
Local revenue $ 102,433 $ 102,433 $ 103,081 $ 648
County revenue 10,039 10,039 9,428 (611)
State revenue 14,596 14,596 13,985 (611)
Amounts available for appropriation $ 127,068 $ 127,068 $ 126,494 $ (574)
CHARGES TO APPROPRIATIONS (OUTFLOWS):
Instructional - regular $ - $ - $ - $ -
Instructional - special education 1,000 1,000 - 1,000
Supporting services - operations & maintenance - - - -
Supporting services - general - - - -
Supporting services - educational media services - - - -
Administration - general 14,439 14,439 14,440 (1)
Administration - business 8,088 8,088 8,994 (906)
Student transportation 114,414 114,414 102,177 12,237
Extracurricular - - - -
Capital outlay - - - -
Other current charges - - - -
Total charges to appropriations $ 137,941 $ 137,941 $ 125,611 $ 12,330
Net change in fund balance $ 883
Fund balance - beginning of the year $ 38,462
Fund balance - end of the year $ 39,345
Cayuse Prairie Public School, Flathead County, Montana
Budgetary Comparison Schedule
For the Fiscal Year Ended June 30, 2014
Transportation
BUDGETED AMOUNTS
-36-
ACTUAL
AMOUNTS VARIANCE
(BUDGETARY WITH FINAL
ORIGINAL FINAL BASIS) See Note A BUDGET
RESOURCES (INFLOWS):
Local revenue $ 300 $ 300 $ 256 $ (44)
County revenue 178,543 178,543 177,221 (1,322)
State revenue - - - -
Amounts available for appropriation $ 178,843 $ 178,843 $ 177,477 $ (1,366)
CHARGES TO APPROPRIATIONS (OUTFLOWS):
Instructional - regular $ 145,368 $ 145,368 $ 144,427 $ 941
Instructional - special education 24,733 24,733 23,313 1,420
Supporting services - operations & maintenance 10,650 10,650 10,623 27
Supporting services - general 5,600 5,600 6,257 (657)
Supporting services - educational media services 8,730 8,730 10,073 (1,343)
Administration - general 18,100 18,100 15,517 2,583
Administration - business 6,440 6,440 6,167 273
Student transportation - - - -
Extracurricular 2,800 2,800 2,536 264
Capital outlay - - - -
Other current charges - - - -
Total charges to appropriations $ 222,421 $ 222,421 $ 218,913 $ 3,508
Net change in fund balance $ (41,436)
Fund balance - beginning of the year $ 88,063
Fund balance - end of the year $ 46,627
Cayuse Prairie Public School, Flathead County, Montana
Budgetary Comparison Schedule
For the Fiscal Year Ended June 30, 2014
Retirement
BUDGETED AMOUNTS
NOTE A: The Miscellaneous Programs Fund is a major special revenue fund is which a legally adopted budget is
not required.
-37-
Actuarial UAAL as a
Accrued Unfunded Percentage
Actuarial Liability (AAL) AAL Funded Covered of Covered
Actuarial Value of Assets Unit Credit Cost Method (UAAL) Ratio Payroll Payroll
Valuation Date (a) (b) (b-a) (a/b) (c ) ((b-a)/(c )
July 1, 2009 -$ -$ 131,092$ 0% 664,971$ 19.7%
July 1, 2012 -$ -$ 187,992$ 0% 971,007$ 19.4%
REQUIRED SUPPLEMENTAL INFORMATION
Schedule of Funding Progress
Cayuse Prairie Public School, Flathead County, Montana
For the Fiscal Year Ended June 30, 2014
Fall Enrollment - October, 2013
Elementary School District FALL
Per Enrollment Audit Per
Reports District Records Difference
Kindergarten Full 27 27 0
Grades 1-6 152 152 0
Grades 7-8 32 32 0
Total Elementary 211 211 0
Part-time Students
Difference
Grade < 181 hrs/yr 181-359 hrs/yr 360-539 hrs/yr 540-719 hrs/yr < 181 hrs/yr 181-359 hrs/yr 360-539 hrs/yr 540-719 hrs/yr
Kinder - Full 0 0 0 0 0 0 0 0 0
Kinder - Part 0 0 N/A N/A 0 0 N/A N/A 0
1-6 0 0 0 0 0 0 0 0 0
7-8 0 0 0 0 0 0 0 0 0
Cayuse Prairie Public School
Flathead County, Montana
SCHEDULE OF ENROLLMENT
For the Fiscal Year Ended June 30, 2014
Per Enrollment Reports Audit per District Records
Winter Enrollment - December, 2013
Elementary School District WINTER
Per Enrollment Audit Per
Reports District Records Difference
Kindergarten Full 26 26 0
Grades 1-6 149 149 0
Grades 7-8 36 36 0
Total Elementary 211 211 0
Part-time Students
Difference
Grade < 181 hrs/yr 181-359 hrs/yr 360-539 hrs/yr 540-719 hrs/yr < 181 hrs/yr 181-359 hrs/yr 360-539 hrs/yr 540-719 hrs/yr
Kinder - Full 0 0 0 0 0 0 0 0 0
Kinder - Part 0 0 N/A N/A 0 0 N/A N/A 0
1-6 0 0 0 0 0 0 0 0 0
7-8 0 0 0 0 0 0 0 0 0
Per Enrollment Reports Audit per District Records
Cayuse Prairie Public School
Flathead County, Montana
SCHEDULE OF ENROLLMENT - Continued
For the Fiscal Year Ended June 30, 2014
Spring Enrollment - February, 2014
Elementary School District SPRING
Per Enrollment Audit Per
Reports District Records Difference
Kindergarten - Full 27 27 0
Grades 1-6 151 151 0
Grades 7-8 37 37 0
Total Elementary 215 215 0
Part-time Students
Difference
Grade < 181 hrs/yr 181-359 hrs/yr 360-539 hrs/yr 540-719 hrs/yr < 181 hrs/yr 181-359 hrs/yr 360-539 hrs/yr 540-719 hrs/yr
Kinder - Full 0 0 0 0 0 0 0 0 0
Kinder - Part 0 0 N/A N/A 0 0 N/A N/A 0
1-6 0 0 0 0 0 0 0 0 0
7-8 0 0 0 0 0 0 0 0 0
Per Enrollment Reports Audit per District Records
Cayuse Prairie Public School
Flathead County, Montana
SCHEDULE OF ENROLLMENT - Continued
For the Fiscal Year Ended June 30, 2014
-41-
Beginning Transfers Ending
Balance Revenues Expenditures In(Out) Balance
FUND ACCOUNT
Pop $ 7,361 $ 7,675 $ 7,915 $ (10) $ 7,111
8th Grade 4,240 1,112 968 1,809 6,193
7th Grade 1,434 674 432 11 1,687
6th Grade 1,139 1,117 59 779 2,976
5th Grade 1,306 676 - (638) 1,344
4th Grade 209 150 208 (58) 93
3rd Grade 163 220 213 (98) 72
2nd Grade 65 210 55 (65) 155
1st Grade - 170 170 - -
Kindergarten - 375 239 - 136
Student Council 3,246 1,013 981 22 3,300
Library 1,026 2,194 2,209 - 1,011
Athletic 85 - - - 85
Fine Arts 999 - - - 999
Outdoor Ed 333 - - - 333
Band 90 - - - 90
Cooking & Sewing 60 - - - 60
MBI 1,134 - - - 1,134
Concession 4 6,434 1,877 (678) 3,883
Odyssey 333 - - (333) -
Interest 376 8 - - 384
Principal 44 - - (44) -
First Aid 255 - - (255) -
Laminating 63 - - (63) -
Cayuse Kids Care 379 - - (379) -
Total $ 24,344 $ 22,028 $ 15,326 $ - $ 31,046
Fiscal Year Ended June 30, 2014
Cayuse Prairie Public School, Flathead County, Montana
EXTRACURRICULAR FUND
SCHEDULE OF REVENUES AND EXPENDITURES - ALL FUNDS ACCOUNTS
Denning, Downey & Associates, P.C. CERTIFIED PUBLIC ACCOUNTANTS
1740 U.S. Hwy 93 South, P.O. Box 1957, Kalispell, MT 59903-1957
-42- Robert K. Denning, CPA ∙ Kim M. Downey, CPA
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED
ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS
Board of Trustees
Cayuse Prairie Public School
Flathead County
Kalispell, Montana
We have audited, in accordance with the auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards issued by the Comptroller General of the United States, the financial
statements of the governmental activities, each major fund, and the aggregate remaining fund
information of Cayuse Prairie Public School, Flathead County, Montana, as of and for the year
ended June 30, 2014, and the related notes to the financial statements, which collectively
comprise the Cayuse Prairie Public School’s basic financial statements and have issued our
report thereon dated June 22, 2015.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered Cayuse Prairie
Public School, Flathead County, Montana’s internal control over financial reporting (internal
control) to determine the audit procedures that are appropriate in the circumstances for the
purpose of expressing our opinions on the financial statements, but not for the purpose of
expressing an opinion on the effectiveness of Cayuse Prairie Public School, Flathead County,
Montana’s internal control. Accordingly, we do not express an opinion on the effectiveness of
Cayuse Prairie Public School’s internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct, misstatements on a timely basis. A material weakness is a
deficiency, or a combination of deficiencies, in internal control such that there is a reasonable
possibility that a material misstatement of the entity’s financial statements will not be prevented,
or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a
combination of deficiencies, in internal control that is less severe than a material weakness, yet
important enough to merit attention by those charged with governance.
-43-
Our consideration of internal control was for the limited purpose described in the first paragraph
of this section and was not designed to identify all deficiencies in internal control that might be
material weaknesses or, significant deficiencies and therefore, material weaknesses or significant
deficiencies may exist that were not identified. Given these limitations, during our audit we did
not identify any deficiencies in internal control that we consider to be material weaknesses.
However, material weaknesses may exist that have not been identified. We did identify certain
deficiencies in internal control, described below that we consider to be significant deficiencies
listed as item 2014-001
2014-001 Budgetary Reporting Error
Condition:
The District budgeted for $22,136 in the Tuition fund for 1900 Other Local Revenues.
The revenue should have been budgeted in 1110 District Tax Levy Revenues.
Context: During the process of comparing revenues we scheduled the budgeted revenues and the
revenues received and identified this error.
Criteria: The District should have internal controls in place to ensure numbers entered into the
budget are correct.
Effect: The overall effect is that the District did not receive the $22,136 in tax revenues due to
the fact that mill levy was not included in district levies. This created the tuition fund to
be in deficit by $7,113.
Cause: Lack of internal controls over budgetary reporting were noted.
Recommendation:
We recommend the District implement internal control procedures to ensure budgetary
numbers are accurate.
Auditee Response:
Internal and external control procedures are now in place to ensure budgetary numbers
are coded under the correct revenue source.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Cayuse Prairie Public School’s
financial statements are free of material misstatement, we performed tests of its compliance with
certain provisions of laws, regulations, contracts and grant agreements, noncompliance with
which could have a direct and material effect on the determination of financial statement
amounts. However, providing an opinion on compliance with those provisions was not an
objective of our audit and, accordingly, we do not express such an opinion. The results of our
tests disclosed no instances of noncompliance or other matters that are required to be reported
under Government Auditing Standards.
-44-
Cayuse Prairie Public School’s Response to Findings
Cayuse Prairie Public School’s response to the findings identified in our audit is described
above. Cayuse Prairie Public School’s response was not subject to the auditing procedures
applied in the audit of the financial statements and, accordingly, we express no opinion on it.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of
the entity’s internal control or compliance. This report is an integral part of an audit performed
in accordance with Government Auditing Standards in considering the entity’s internal control
and compliance. Accordingly, this communication is not suitable for any other purpose.
June 22, 2015
Denning, Downey & Associates, P.C. CERTIFIED PUBLIC ACCOUNTANTS
1740 U.S. Hwy 93 South, P.O. Box 1957, Kalispell, MT 59903-1957
-45- Robert K. Denning, CPA ∙ Kim M. Downey, CPA
REPORT ON PRIOR AUDIT REPORT RECOMMENDATIONS
Board of Trustees
Cayuse Prairie Public School
Flathead County
Kalispell, Montana
The prior audit report contained one recommendation. The action taken on each
recommendation is as follows:
Recommendation Action Taken
Capital Assets Implemented
June 22, 2015
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